Govt may zero-rate some items under SST in future, says Guan Eng

Finance Minister Lim Guan Eng says although sales tax has been fixed to be between 5 and 10 per cent and service tax at 6 per cent from September 1, the rate for goods and services may be lowered in future. — Picture by Shafwan Zaidon

PUTRAJAYA, Aug 30 ― Although the government has fixed sales tax to be between 5 and 10 per cent and service tax at 6 per cent from September 1, the rate for goods and services may be lowered in future, Finance Minister Lim Guan Eng said today.

He said the quantum under both taxes ― collectively known as the sales and service tax (SST) ― will remain for now on the list of 5,443 consumer goods and 25 categories of services it had earmarked in a list.

“But along the way there will be some shifts from items under the 10 per cent tax bracket to 5 per cent and from 5 per cent to zero per cent,” he said in a media briefing here.

“One example is the ‘tayar celup’, which is at 10 per cent at the moment, but we plan to revise it to 5 per cent later,” he said.

The term “tayar celup” refers to retreaded tyres that are sold for reuse at a cheaper price.

Lim said most of the consumer goods and services subject to the new SST were derived from the old SST list, but will be revised accordingly.

“We are guided by the old SST, the only difference is the threshold has been increased and there are more exemptions now,” he added.